The number of homes selling above asking price in the Los Angeles metropolitan area dropped by more than 6 percent in 2019, according to a new data analysis.
Roughly 28 percent of Los Angeles-area buyers paid above the asking price for residential property in 2019, at a median rate of $12,000, according to Zillow data. That compares to the $15,000 paid by 34.8 percent of home buyers in 2018, the study found. In 2018, nearly 40 percent of homes in LA were selling above the listed price.
Nationwide, buyers who paid above asking price forked an additional $5,100 on the sale price in 2019 — down from $5,500 in 2018 and the lowest since 2011.
“The housing market took a breather in 2019, after years of red-hot sellers’ markets,” said Zillow economist Jeff Tucker. “Many sellers were caught off-guard by the changing conditions, and ended up accepting offers at or below list prices that were dreamed up during the height of the frenzy.”
Although the bidding wars cooled a bit, the San Francisco and San Jose areas remained the most heated markets in the country, the Zillow study found. In 2019, 48.6 percent of homes sold for an average of $37,500 above the list price in San Francisco. That compares to 61.1 percent of San Francisco homes selling for $50,000 above the asking price in 2018.
Buying a home in Silicon Valley has been especially challenging, where buyers last year in the White Oaks neighborhood had to shell out over $1.8 million total to beat multiple bidders.
Although the climate is looking better for buyers at the moment, Tucker warned that the inventory of homes for sale across the country remains “incredibly tight.”
He expects the U.S. market to heat up again in the spring. “Sellers hoping to cash in and upgrade should proceed with care.”
Some takeaways in other markets outside California in 2019:
- Competition for homes was still intense in Boston (where 34.7 percent of homes sold above list price), Minneapolis-St. Paul (34.3 percent) and Seattle (31.2 percent).
- Areas with the the least competition included Miami (8.9 percent of homes sold above asking), Las Vegas (12.6 percent) and Tampa (13.3 percent).
- In New York City, 19.3 percent of homebuyers were paying $11,000 above the asking price in 2019. That’s a slight decrease from 21.7 percent paying $11,000 in 2018.